At the height of the housing crisis, when the sale of distressed properties (short sales and foreclosures) across the United States began to increase, Congress passed the Mortgage Forgiveness Debt Relief Act of 2007, designed to provide at least some consolation to people who had lost their homes.

The law states that only debt forgiven in calendar years 2007 through 2013 is eligible. Up to $2 million of forgiven debt qualifies for this exclusion ($1 million if married filing separately). To get the relief, debt must have been used to buy, build, or substantially improve a principal residence and be secured by that residence.

So, if you’re clinging to your house but it’s looking as though you won’t be able to hang on, the best time to get out from under the mortgage is before the debt relief law ends. This is particularly true if you are considering a “short sale”. That’s when the lender allows the borrower to sell the house for less than what is owed. Often, the borrower can negotiate to have the remaining balance on the mortgage forgiven.

This tax rule has become particularly important as more homes are sold through short sales. In the Outer Banks, “short sales” accounted for 14% of all residential sales thru Q3 of 2011 and REO (bank owned) properties accounted for 24% of all residential sales thru Q3 of 2011.

Here are the facts about Mortgage Forgiveness Debt Relief Act :

Up until December 31, 2013, taxpayers that qualify under the guidelines of the Mortgage Forgiveness Debt Relief Act and Debt Cancellation can discharge the amount of forgiven debt as taxable income. You can view the qualification through the IRS website.

Summarizing the site: If you complete a short sale or your property is foreclosed on, you may not have to claim the difference in the amount of settlement as taxable income.

However, if you complete either of the above AFTER the Mortgage Forgiveness Debt Relief Act expires in 2013, you WILL be held responsible for the difference as taxable income.

Here is an example:

Short Sale or Foreclosure Before December 31, 2013	Short Sale or Foreclosure After December 31, 2013
If you owe $300,000 and the property sells for $200,000 $100,000 difference in reported income is NOT taxable in most cases $100,000 @ 0% = $0 in additional taxes owed to the IRS*	If you owe $300,000 and the property sells for $200,000 $100,000 difference in reported income IS taxable in most cases $100,000 @ 28% tax bracket = $28,000 in additional taxes owed to the IRS*

*Not all properties qualify. View the IRS Mortgage Forgiveness Debt Relief Act to see if your home qualifies. Team Realty at Continental Properties, Inc. (561)459-4361 / Teaminfo@Teamrealtydelivers.com Search Team Realty Homes For Sale If you’re considering Buying, Selling, Relocating, or Investing in Palm Beach County and need a Professional Realtor, it would be our pleasure to help you! Be sure to visit Team Realty for total access to all available homes in the Palm Beach County area.

How Safe Are You Keeping Your Clients?

In a day and age where few of us can imagine life without a computer or the internet, how many real estate professionals consciously think about the safety of their client’s data? In Florida, one of the duties required of all real estate licensees is “skill, care and diligence in the transaction”. I believe most other states have some form of this as a duty of a real estate licensee.

Many people assume this to mean:

· Being knowledgeable about the market and subject property

· Care in all aspects of the transaction

· Diligence in follow-up

Have you thought about how this relates to keeping your client’s information safe?

According to Andrew Wooton (“Protected by Being Proactive.” Florida Realtor Nov. 2011: 14, 31. Print.), identity theft is the #1 crime nationwide. Wooton goes on to say that real estate is the #1 industry for identity theft. Brokerages are prone to technology and confidential record theft. The reasons for this are because we are collecting more personal information than in the past. Agents are getting this information because of the requirements for short sales and foreclosures. Wooton goes on to say “The going rate for a stolen customer file is $500 in Florida”.

What are you doing to protect your clients’ sensitive information? Is it easy for someone to steal your clients’ information in paper or electronic format from you? What would be your liability? These are important questions each of us needs to ask ourselves.

It is critical for us as professionals to safeguard our client’s information with skill, care and diligence. Over the next month, I will be sharing important insights in our obligations to keep people safe. These insights will range from physical to electronic security.

Many may have thought about this at one point or another but never acted on it. True, there is normally some cost associated with security. That said, what is the cost of not being secure?

SHBO Technologies, LLC | 510 Business Park Way Ste. B | Royal Palm Beach, FL 33411 | Phone: 561.283.0825

"Peace of mind with your computers. Guaranteed."

Home Buying Checklist

• Know what you’re looking for and what types of houses you are looking for
• Know who are the key players involved in a real estate transaction and their role in the process
• Get your financial picture in focus; credit card debt, school loans and other commitments
• Familiarize yourself with the mortgage process
• Get prequalified for a mortgage. This will significantly strengthen your offer when you find a house to your liking
• Contact Team Realty at Continental Properties, Inc.
• Start househunting!
• Negotiate your best price!
• Make a formal loan application
• Make arrangements for a home inspection
• Secure the final loan approval from your lending institution
• Do a final walk through of the house
• Final closing and settlement
• Move in to your new home and enjoy!

Team Realty at Continental Properties, Inc.

Royal Palm Beach * Wellington * West Palm Beach * Palm Beach Gardens * Boynton Beach * Jupiter * Loxahatchee * North Palm Beach* Boca Raton

What is a team? What is a group? Is it better to have a team or a group when dealing with real estate? Why should I work with a team?

Need help saving your home?

Some Florida home owners may soon receive help from the federal government. About 40,000 struggling Florida homeowners may soon get help making mortgage payments in an effort to help stave off foreclosure.

On Tuesday the Florida Housing Finance Corp. said it is expanding the federal Hardest Hit Fund statewide.

The $1 billion fund will help eligible homeowners make mortgage payments for up to 6 months. Homeowners must be unemployed or their housing cost must be 31 percent or more than their income. Delinquent homeowners who are now able to start making payments could also get help getting current on their loans.

On February 19, 2010, the U.S. Department of the Treasury, announced that the fund provides federal money to states hardest hit by the aftermath of the housing bust. To date, $7.6 billion has been allocated to 18 states and the District of Columbia.

In October, a pilot Florida program began in Lee County. The expanded statewide program will begin accepting website applications at 9 a.m. April 18.

Cecka Rose Green, spokeswoman for the housing group, said she recommends homeowners act quickly.

"A billion dollars sounds like a lot of money," she said. "But there are hundreds of thousands of people who probably need help. The money will run out."

Participants must be owners of single-family homes who are no more than 180 days delinquent on their mortgage payments.

The program will be slightly different than the pilot program in Lee County. The pilot program paid 100 percent of homeowners' mortgage payments. Homeowners will now have to contribute at least $70 per month or 25 percent of their monthly income. And the assistance will only last up to six months now, down from 18 months.

Previously, homeowners were eligible for up to $35,000. The assistance amount is much lower now.

There will be two programs, one for the unemployed and one to help homeowners who've found work get caught up on payments.

The Unemployment Mortgage Assistance Program will provide up to $12,000 to pay monthly mortgage and escrowed mortgage-related expenses for up to 6 months, or until the homeowner can resume making mortgage payments.

The Mortgage Loan Reinstatement Payment Program will provide up to $6,000 to bring the homeowner's mortgage current, if the homeowner is able to make mortgage payments.

Homeowners can apply for assistance through the Florida Finance Corporation website.

Watch out for scams

A number of areas report scam operations using the "The Hardest Hit Fund" name to take advantage of homeowners. To apply for aid money, refer only to the Florida Finance Corporation website.

If you have questions please contact Team Realy at Continential Properties, Inc 561-459-4361

Team Realty at Continental Properties, Inc.

Royal Palm Beach * Wellington * West Palm Beach * Palm Beach Gardens * Boynton Beach * Jupiter * Loxahatchee * North Palm Beach